A Comparative Review of Methods to Create a Composite Index for Sustainable and Inclusive Wellbeing
How to measure a country's true wellbeing beyond just GDP
Measuring a nation's success requires looking far beyond GDP—but combining all the pieces of sustainable wellbeing into a single number is fraught with hidden choices. This review compares 13 methods for building such an index and finds that no single approach handles all the key ingredients fairly: none can simultaneously penalize inequality, respect environmental limits, account for trade-offs between countries, and measure things the way they actually interconnect.
Countries currently use GDP to guide trillion-dollar decisions on spending, regulation, and priority-setting—even though it ignores health, inequality, and environmental damage. A better wellbeing index could redirect policy toward what actually improves lives. The paper shows that how you build this index matters enormously: different methods rank countries in completely different orders, meaning the choice of measurement method itself becomes a political decision that affects which nations look successful and which look like they're failing.